NEW YORK (
) -- Banks have eased lending standards to residential borrowers, though only slightly, according to a
Federal Reserve survey
of senior loan officers.
Out of 67 loan officers responding to a survey question about credit standards on prime residential mortgages, seven said their bank had "eased somewhat," 58 said standards remained unchanged and two said they had "tightened somewhat." No banks said they had either tightened or eased their standards considerably. The identities of the banks weren't disclosed.
The slight easing of standards came as banks reported increased demand for prime residential loans.
A similar trend could be seen with regard to nontraditional residential mortgages, though just 32 loan officers responded to that question. Only four loan officers responded to a question about subprime loans, with three saying their standards remained unchanged and one small bank saying it had tightened its standards considerably.
The responses were part of a survey of 95 senior loan officers in the first half of July, covering business conditions over the previous three months.
While the easing of credit standards by banks was only moderate, lending to businesses eased more meaningfully, according to the survey. Banks cited increased competition as the main reason for easing their standards.
Written by Dan Freed in New York